IRELAND - Aer Lingus said it will negotiate with trustees of both its defined benefit schemes to create a defined contribution plan for all its employees as part of a company cost-cutting measure.
The airliner announced today it planned to axe some 600 staffers as part of a two-part "transformation plan" that will save the company €97m (US$142.5m), excluding fuel costs, per year.
Part of the plan is to tackle a deficit in the company's pension fund.
The company said: "Aer Lingus' employees face significant challenges in relation to the current deficits in the Irish Airline Pilots Superannuation Scheme and the Irish Airlines (General Employees) Superannuation Scheme, into which Aer Lingus makes fixed payments on a defined contribution basis."
According to the company's annual report, Aer Lingus paid €29.3m into its defined benefit pension funds in 2008.
The company said it has met with trustees and discussed the possibility of adopting "defined benefit accounting rules for the schemes, which would result in both income charges and significant balance sheet liabilities."
Aer Lingus also said it has proposed introducing a defined contribution scheme for all employees that will "attempt to recognise" past service.
The firm said it will talk to its pension fund trustees about the finding a pension solution, but provided no further details.
Spokeswoman Sheila Gahan could not immediately provide more details.
Most respondents in this week's Pensions Buzz do not think businesses should be able suspend AE contributions if in financial distress.
Former BHS owner Dominic Chappell has lost the appeal against his section 72 conviction and sentence for failing to hand over information to The Pensions Regulator (TPR).
This week's top stories include Marsh and McLennan Companies agreeing to buy JLT, and the home secretary calling for AE to be scrapped in a no-deal Brexit scenario.
Lesley Titcomb says the watchdog wants closer interactions with pension funds to spot problems sooner and act before having to use its more stringent powers